Under the terms of the Agreement and Plan of Merger, each share of Nordstrom common stock not already held by the Family Group or Liverpool (and not rolled over) was converted into the right to receive $24.25 per share in cash. The merger consideration represented a premium of approximately 42% (42.1% per the proxy statement) over Nordstrom's unaffected closing stock price on March 18, 2024, the last trading day before media speculation about a potential transaction began. The Nordstrom board also declared a special cash dividend of $0.25 per share and a stub-period dividend of $0.1462 per share, both contingent on closing and paid May 27, 2025 to holders of record as of May 19, 2025; outstanding vested options, RSUs and PSUs were cashed out based on a combined reference price of $24.50 per share (merger consideration plus the special dividend).
Following the closing, the Nordstrom Family holds a 50.1% ownership stake and Liverpool holds 49.9%, consistent with the ownership split disclosed at signing. The deal was financed through rollover equity contributed by the Family Group and Liverpool, cash commitments from Liverpool, up to $450 million of borrowings under a new $1.2 billion senior secured asset-based revolving credit facility (arranged with Wells Fargo Bank, N.A. as agent) -- of which $450 million was drawn at closing -- and Nordstrom's own cash on hand. Nordstrom's approximately $2.7 billion of existing senior notes and debentures remained outstanding after closing and were secured with new second-priority liens on the company's current assets and first-priority liens on its other assets (excluding real estate). Concurrently with closing, Nordstrom also repaid and terminated its prior revolving credit agreement with Wells Fargo.
In fairness analyses prepared for the Special Committee's financial advisors, Centerview Partners' selected public companies analysis, based on department-store peers and Wall Street consensus FY2024 and FY2025 adjusted EBITDA estimates, implied a per-share value range of $14.60 to $21.05 for fiscal 2024 and $17.75 to $25.00 for fiscal 2025, both below or bracketing the $24.25 merger price. Morgan Stanley's comparable company analysis applied a representative AV/EBITDA multiple range of 3.5x to 5.0x to Nordstrom's estimated adjusted EBITDA. Centerview's discounted cash flow analysis used discount rates of 11% to 13% and perpetuity growth rates of 1.5% to 2.5% applied to management's "December Projections." No synergy estimates are disclosed in the sourced materials, consistent with a going-private transaction with no operating combination of two public companies.
According to a court declaration by Erik Nordstrom filed in related shareholder litigation, the going-private idea originated with Erik and Pete Nordstrom's own view that the company's next growth phase would be better pursued as a private company; they raised this with the board in February 2024, prompting formation of a three-member Special Committee (Kirsten Green, Amie Thuener O'Toole and Eric Sprunk, as chair) to oversee the process. The Special Committee ran a multi-month solicitation process beginning in 2023-early 2024 that included non-disclosure agreements with seven invitees (including Liverpool, which initially attended only as a passive observer) and outreach to multiple private equity sponsors (referred to in the proxy as "Sponsor E" and "Strategic C," among others) before the Family Group and Liverpool were authorized to pursue a joint proposal as a "Bid Group" in the fall of 2024. Eric Sprunk, the Special Committee chairman, stated the committee "reviewed this proposal against the Company's standalone prospects for growth" and, "following a rigorous and independent evaluation and consultation with outside financial and legal advisors, ... unanimously concluded that this transaction offers greater value for all public shareholders at a significant premium to the unaffected share price." The proxy also discloses that the Nordstrom board assessed that the company's "trading multiple appears range bound based on negative investor sentiment about the retail department store sector."
The merger agreement provided for a termination fee payable by Nordstrom to Parent of $85 million if Parent terminated following an adverse recommendation change by the Nordstrom board, or $42.5 million under specified competing-proposal/failure-to-obtain-shareholder-approval circumstances. Parent was required to pay Nordstrom a reverse termination fee of $170 million if Nordstrom terminated due to Parent's material breach or failure to close (or related circumstances), or $100 million if either party terminated due to a below-investment-grade ratings event. The proxy statement's background section also describes earlier negotiating rounds in which the Bid Group's proposals included termination-fee structures expressed as a percentage of equity value (ranging from roughly 2% to 7% of equity value at various points in the negotiation) before the parties settled on the fixed dollar amounts above.
Approval required both a two-thirds vote of all outstanding shares and a separate majority-of-the-minority vote of unaffiliated shareholders. At a special shareholder meeting held May 16, 2025, with 142,942,995 shares (approximately 85.47% of shares outstanding) represented, shareholders approved the merger: the two-thirds approval vote passed 142,030,974 for to 770,781 against, and the majority-of-the-minority vote (based on 96,549,953 shares entitled to vote in that sub-class) passed 71,381,079 for to 770,781 against. The merger became effective May 20, 2025 upon filing of Articles of Merger with the Washington Secretary of State. Nordstrom common stock ceased trading and was delisted from the NYSE effective May 21, 2025, and the company subsequently filed to deregister under the Exchange Act. Erik and Pete Nordstrom continue to lead the company as Co-CEOs post-closing.
On financial advisors, Morgan Stanley & Co. LLC and Centerview Partners LLC acted as financial advisors to the Special Committee of the Nordstrom board. Moelis & Company LLC acted as financial advisor to the Nordstrom Family. J.P. Morgan Securities LLC acted as financial advisor to Liverpool. On legal advisors, Sidley Austin LLP and Perkins Coie LLP acted as legal counsel to the Special Committee; Wilmer Cutler Pickering Hale and Dorr LLP (WilmerHale), Lane Powell PC and Davis Wright Tremaine LLP acted as legal counsel to the Nordstrom Family; and Simpson Thacher & Bartlett LLP and Galicia Abogados, S.C. acted as legal counsel to Liverpool.